Since the revelation about its financial crisis, Howard Brown Health Center ( HBHC ) has been faced with calls that the board and staff members responsible should resign. On Dec. 6, the organization's board announced what it called a "Responsible Transition Plan." According to its timeline, there will be an entirely new board by the start of the next fiscal year starting July 1, 2011.
The plan will be executed in two phases: First, the executive committee of the board and additional members will resign effective Dec. 31. These are Board Chair Mark Andrews, Laura Angelucci, Janet E. Henderson, Steven Phelps, Brett Stolz and Charles Katzenmeyer. This leaves the board reduced by about half of its members but with enough to fulfill funding and grant requirements, including the critical Federally Qualified Health Center ( FQHC ) application that requires at least nine members. FQHCs are required to ensure that at least 51 percent of board members be people who use the organization's services. This has not been the case at HBHC; CEO Jamal Edwards acknowledged that "in the past we could have done a better job of recruiting board members who are actively engaged in our services—and we're going to do that."
Remaining board members will seek and fill applications for new board members and ensure the transition. Of the remaining members, only Frank Buttitta and Karma Israelsen, who joined in the summer and fall of this year, respectively, after changes had begun, will not step down.
The announcement is likely to be supported by those who have called for the immediate resignation of the board, but given HBHC's history of being closely guarded about the operation of the board and the extent of the financial crisis in which it finds itself, questions are likely to emerge about how much oversight there might be over its new process.
Edwards, in response to questions from WCT, said that he had "recommended that the board appoint a selection committee that will be [ composed ] of some board members, some staff representatives, representatives from the community … and also our stakeholders, such as our foundation and corporate grantors—so that it's independent and transparent and community focused. That selection committee is now in the process of being formed." Asked about his own input, he said he would make his own recommendations but that the decisions would rest with the committee. Edwards has, in the past, spoken about wanting the board to be broadly representative of community interests.
Boards are also required to have some kind of oversight committee or person to ensure that they understand their responsibilities, and HBHC has not had that in the past. According to Edwards, HBHC has applied to The Law Project—an organization that provides pro bono legal assistance to nonprofits—to have it review its bylaws and conflicts of interest policies "to make sure that they meet the gold standard of governance and control for an organization and FQHC."
Edwards said that HBHC had already met 80 percent of its goal of the first 500,000 and he was sure that 100 percent would be met by Dec. 23. In the event that this did not happen, "we have one resource [ an anonymous organization which has already made a significant donation ] we can go to for short-term support. So there is no plan or expectation that we're going to cut any services or run the risk of shutting down at the end of the year." HBHC's strategic plan is to be unveiled in the beginning of 2011.
Responding to the latest news, community members greeted the news with studied caution and indicated their support for the organization. Rick Garcia, political director of Equality Illinois and a client of HBHC, said that he had "the highest regard and respect for Howard Brown because they provide services to people who otherwise would not have services particularly trans people. I know transgender folks who come from as far away as Rockford and Decatur so that they're treated with respect." [ Note: Garcia was speaking as a private individual, not as a representative of Equality Illinois. ]
However, Garcia also pointed out that a new board was essential for many in the community to regain their trust in the organization, saying that he knew "many people who said, 'Don't give them a dime until that board of directors and those executive officers are gone because they either knew about the problem or if they didn't know about the problem. What were they doing?'" Garcia added that "Howard Brown needs to continue because it does a great service for this community, and those who have mishandled this great service over the past couple of years need to be gone. From top to bottom."
Mona Noriega, currently a doctoral student at UIC, was previously regional director of Lambda Legal and a board chair of Girl's Best Friend, a foundation that closed its doors in 2007. As an adjunct, Noriega has also taught a class in the nonprofit-management program course in Loyola's social work program. She toLD WCT that what happened to HBHC needed to be considered in the larger context of what was happening to all nonprofits, not just the gay ones, in a bad economy that "reveals the weaknesses all over the place."
According to Noriega, a critical role of any board is to "oversee the financials." But that, she said, is also what most board members are least likely to want to do, simply because it is among the most unpleasant tasks: "People just run from that. Many people can't figure out how to look at the balance sheet, how to look at the cash flow. Those are tools that are required. The board is required to look at those. The board is supposed to be responsible."
Noriega emphasized that while she could not speak to the particulars of HBHC, the problem with nonprofits in general is "the challenge of getting qualified people, whether staff or board, to understand what their roles and responsibilities are." People often come to their membership on a board with passion, "but passion's just not enough." She spoke of the need for better leadership training and skills development, "because nonprofits require not only people who are invested in their communities but who are skilled."
At the same time, according to Noriega, boards also need to have structures in place to prevent problems. Pointing to the fallout of the Bernie Madoff scandal, she said that one of the hard lessons from that was too many nonprofits had boards consisting of people brought on because they agreed with each other, resulting in damaging investments with no oversight. ( A lot of nonprofits lost money through Madoff, who especially used their common link—Jewish connections—to exploit them. ) This could have been prevented if the boards had a diversity not just of race, "but of opinion and skill level. If you had a board that consisted of all your friends, you weren't able to execute the kind of fiduciary evaluation that was required to be able to see that this person Madoff was selling something based on prejudice.
"The problem is that when you have a board with people of similar minds and opinions, you're not pulling a diversity of viewpoints or a diversity of skills that allows for you to be able to say, 'Oh, you're making these financial decisions and perhaps you don't have that experience.' And that's why you need to have someone on your board who does have the financial experience. I think it's a general comment on nonprofits. Recruitment, orientation, evaluation, feedback, learning opportunities—there's a whole checklist of things that need to happen at the board level. And so I wonder if those were in place [ at HBHC ] ."
Noriega also emphasized that the HBHC case allowed "an opportunity to learn. ... How do we use this as a community to learn how we support nonprofits? There must be something we can learn from this and not suffer this particular loss."
WCT contacted HBHC Board Chair Mark Andrews for an interview, but he did not respond before the publication went to press.
